Home health scrutiny heating up as industry enters pre-claims review

Home health providers are facing calls for lower reimbursement along with double-digit fraud sentences as several states prepare for what one expert is calling the “chaos” of pre-claims review.

According to an op-ed published in the The National Law Review by healthcare attorney Bob Morgan, the new pre-claims review for home health providers designed to prevent fraud will cause “chaos” as new payment regulations lead to “ambiguity and confusion” regarding reimbursement requirements. Morgan notes that several questions still surround the program, including how to document a face-to-face encounter between a physician and patient eligible for home health services.

The pre-claims review program has faced resistance from the home health industry, while the Centers for Medicare & Medicaid Services' previous plan involving prior authorization drew criticism from more than 100 legislators.

But there is still widespread concern regarding overpayments among home health agencies, as demonstrated by a letter from the Medicare Advisory Payment Commission (MedPac). The agency advised CMS to lower reimbursement rates for home health services noting that “Medicare has overpaid for home health care since the inception of the prospective payment system in 2000, and more reductions are necessary to stop this pattern from continuing.”

On the enforcement side, home health owners are facing extended prison sentences for fraud schemes. Last week, the owner of three Miami home health agencies was sentenced to 20 years in prison and ordered to pay $36.4 million in restitution for a seven-year scheme in which he paid kickbacks to doctors, patient recruiters, and staffing groups. The Office of Inspector General has highlighted home health fraud as a top priority by identifying common billing outliers associated with overpayments.